The news that college debt is so bad that it’s a national disgrace.
A new study has concluded that it is costing the US economy billions.
That’s because it’s an outlier.
According to a new study, about 20 percent of US college students default on their student loans every year.
And the study’s findings echo the same ones that led to the Federal Reserve’s March decision to start a massive bond-buying program.
The study, which looked at the costs of defaulted loans at more than 300 colleges, found that default rates were higher for students who took out loans from private lenders.
But the study also found that the problem of default is only a tiny part of the problem.
“The vast majority of students who default on student loans do so because they’re not able to pay,” said Robert M. Hickey, the study author and professor at Georgetown University’s Center for Consumer Policy and Technology.
“In many cases, students default because their parents don’t pay their bills.
They default because they don’t have the resources to pay.
That doesn’t make sense.”
And while the majority of college students who fail to pay back their loans do not owe their parents, there is one group of students whose debts are so out of whack that they can’t afford to pay it back: students who attend private universities.
“It’s not only the people that default that are hurt by it,” Hickey said.
“The people that do get defaulted are those students who are at a higher-cost private university that are going to have a larger financial burden because they can no longer pay their debt.”
For the first time, Hickey and his colleagues found that students with private-school loans had higher default rates than students who were not in private schools.
They found that while default rates on private loans rose, the rates on federal student loans rose less.
“Private schools make the best use of student debt.
The federal government should not take away from that,” Hinson said.
But, he said, that’s not the way the federal government treats student debt as a whole.
In a statement to Business Insider, the National Association of Private Colleges and Universities (NAPCU) criticized the study and said it shows that “a number of federal agencies and their agencies have failed to understand and respond appropriately to the crisis facing student borrowers.”
“It is clear that this report was not meant to serve as a critique of the administration’s response to the issue of student loans, but instead is an attempt to justify its own actions,” the statement said.
The NAPCu’s statement also suggested that the federal department of Education’s Office of Civil Rights should have acted sooner to ensure that private schools are “free from discrimination” on the basis of race and ethnicity.
In his own research, Hinson found that in 2014, nearly 20 percent, or 3.5 million, of all federal student loan defaults were from private-college borrowers.
That percentage is roughly double the number of defaults in the public system.
The National Student Loan Data System, which includes private-sector data, has a higher default rate than the NAPCAU, and it is also higher than the Department of Education.
In 2014, the Office of Student Financial Aid, which oversees the Department’s federal student aid program, had a default rate of about 15 percent.
In 2016, it was closer to 30 percent.
Hickey said that the data from the federal Department of Agriculture shows that in 2015, about one in five federal students defaulted on their federal student debt, and that rate is about 1.7 percent.
That is a far cry from the 14 percent of students that defaulted in the private sector, which is less than one in three.
Hitting the debt ceiling is a good way to get more money for college, but not without some compromises.
Hickinson said that even though students can only pay back the interest on their loans in full at the end of their terms, they should not be paying a higher rate than other borrowers.
“You can’t get the maximum amount you can out of your loans,” he said.
Hicker said he hopes that students and lenders can agree on a formula for paying off their student debt at the same rate that private lenders are paying.
And in the meantime, the federal student lending industry is preparing to start taking advantage of the new federal student-loan-recovery package.
“If we don’t take advantage of this opportunity, we’re going to lose a whole lot of the good-paying jobs that are out there,” Hicker said.